How technology is transforming McDonald's operations

September 19, 2019 16:50
McDonald's is expected to gain substantial benefits from its adoption of new technology. Photo: Reuters

McDonald’s posted a 20 percent rally year-to-date following a 35 percent jump last year, making it one of the best-performing blue chips in the US equity market.

The fast-food giant reported US$7.5 earnings per share last year, 53 percent more than in 2015. Apart from improving profitability, investor enthusiasm is also boosted by the hope that the company’s adoption of new technology will bring substantial benefits.

This year alone, McDonald’s has acquired several tech firms.

In March, the company announced its purchase of Dynamic Yield. Dynamic’s artificial intelligence (AI) technology can create menus tailored to prevailing weather and restaurant traffic conditions.

McDonald’s has already introduced the technology to more than 8,000 stores in the United States and the outcome is said to be satisfactory.

The company also aims to use AI to improve service to drive-through customers, which account for half of its revenue in the US and Australia markets.

By using speech recognition technology from Apprente, an Israel-based startup that it acquired just this month, drive-through customers may soon be able to order through a smart speaker.

Despite slowing expansion in the US market, McDonald’s continues to see robust growth in other markets such as Southeast Asia, Africa and Russia.

Growth opportunities in emerging markets and hopes that McDonald’s investment in technology would yield handsome savings and create new sales opportunities combine to support the robust share price performance.

The full article appeared in the Hong Kong Economic Journal on Sept 19

Translation by Julie Zhu with additional reporting

[Chinese version 中文版]

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Hong Kong Economic Journal columnist